Firing Your Brother-In-Law

Quick Summary: Hire only people that you need and not friends and relatives that you may have to terminate.

Abstract:

You will naturally share your plans for your new company with close friends and relatives first. Some will quickly embrace your vision and want to be part of your plan. Unfortunately, statistics show that most companies are not successful. Either fundamental company issues or issues with those friends and relatives that you have brought into the business may put you in the unenviable position of having to terminate them.

After your new idea epiphany occurs, and you feel confident it will be the basis of an overwhelming successful new company, you will naturally begin to socialize the idea with your friends and family. Based on your close personal relationships, your audience will want to believe in you and your idea and will most probably share your enthusiasm. Based on hearing about the “overnight success” of some of the new billionaires who monetized their ideas, they may eagerly want to join you on the ground floor level to ride the gravy train to untold wealth.

There are some significant advantages in bringing these friends and family members into the business: You each know each other’s strengths and weaknesses, you mutually feel a sense of loyalty and openness, and you also can trust each other beyond a shadow of doubt. All of these are wonderful attributes and are desirable in any relationship. However, these attributes are simply not enough.

There are a few key questions that the entrepreneur needs to objectively ask and answer long before a commitment to bring a friend or relative on board:

Does the person have skill sets that are truly needed at this time?

Does the person fully understand that the risk of failure is far higher than the chances of modest success?

Does the person have the right temperament to survive the long hours, ups and downs, and seemingly never-ending issues that will come up and need to be addressed?

Does the person have the financial resources to survive with little or no income for an extended period of time which could easily be two or three years, without receiving any compensation from the company?

Do you believe the person could take their “rightful place” in the organization as it expands, perhaps no longer reporting to you or becoming one of the top level managers?

Assuming you feel reasonably confident that there are positive responses to these five questions, the true acid test question that must be answered is: If, for whatever reason, the person does not “work out”, can you terminate them? Actually, this question needs to be asked first, long before you begin any meaningful conversations with the person. If this situation did arise and if the person in question was your brother-in-law, how would your sister and all of your other relatives react? Would holidays and other festive occasions become separate events?

You may already know some individuals that are part of an established family owned business. In all probability, they are experiencing or have already gone through the gut wrenching situation of having one or more family members that have in the past or are currently causing turmoil or hampering the business’s success. Although problematic for an established business, the issues and impacts in a startup can be much more severe. If the firing your brother-in-law scenario was not bad enough, consider the situation if you and your spouse are in business together! Aside from the dual exposure with financial security, it would be virtually impossible not to have business issues follow you home and into the bedroom!

Isolating friends and family from your new enterprise also may involve risks. Hurt feelings along with selfishness, greed, and insensitivity accusations, spoken and not spoken, may come your way. With success, those feelings may grow and fester. Your motive of protecting the relationship by not involving those close to you may never be fully appreciated. However, the downside associated with being in the awkward position of terminating your best friend or brother-in-lay will be worse.

Michael Corleone in the movie The Godfather said: “It’s nothing personal, Sonny—it’s strictly business.” Unfortunately, in the real world, when terminating a friend or relative, it will always be both. Involving or not involving friends and family are treacherous waters that you will need to carefully navigate.